"Gallup: Percent Republicans that believe that the US economy is 'getting
better' jumped from 16% just prior to the election to 49% after the election."

- Zero Hedge, November 24.

"Trump is meeting with an ex-bank CEO who wants to abolish the Federal
Reserve and to return to the gold standard."

- Business Insider, November 29.

"Krugman: Trump is the 'worst man we could have made president'."

- Business Insider, November 29.

Perspective

It is uncertain if Krugman knew about the discussion of a gold standard. Possibly
not, as he would have become apoplectic and unable to comment. The
"ex-bank CEO" is John Allison who recently retired as president of the Cato
Institute. Our comment on a convertible dollar has been that it "manages" the
ambition of government. This contrasts with the long-running promotion that
a committee of experts must have a fiat currency so they can "manage" the economy.
In so many words, a convertible currency disciplines predatory bureaucracy.

The Republican platform in the 1980 election included the constraint and honesty
of a gold standard. A serious attempt was made, but was derailed by the serious
recession that began in 1981. Also, Democrats had the majority in both houses.

With their strongest position since 1928, the Republicans have a mandate for
reform. That would be towards a civil service and administration bound by constitutional
norms. It is almost startling to think that immigration agencies would obey
their own regulations.

Other interesting news is the sharp decline in the November post on the satellite
global temperature. This set a big high with the 2015-2016 El Nino and the
drop is steeper than the one following the last strong El Nino in 1989. It
is now plunging at the fastest pace on the 28-year record.

A few months ago, climatologist Roy Spencer updated the chart. This showed
the decline needed a significant plunge to resume the 18-year flat trend. It
looked a long way, but it is almost there now.

The main forces acting to restore the flat-lining trend are that the El Nino
weather-event is over and the Solar Minimum, which is a climate event, continues.
November 22nd and 23rd set two "zero" days, making 25 for the year. The last
cyclical minimum clocked 260 "spotless" days in 2009 and 51 days in 2010.

Inspired by experts, the overbearing state needs to maintain the front of
omniscience as well as the endless funding. More and more people are becoming
indifferent to its climate propaganda. A cool winter could spread skepticism.

And we all know that state funding relies upon the perpetual financial bubble.
The plunge in long-dated Treasuries since July is serious. The crash in Municipal
bonds is worse. The bond bubble is in the early stages of a profound deflation.

Currencies

We have had two reasons for the firming dollar. One is the chart pattern and
the other will be debt service into New York payable in US dollars. Now, there
is another reason. The Republican majority will redirect the Federal Reserve
from reckless speculation to prudence. This could be disquieting to interventionist
economists. They could eventually be reduced from rent-seekers to real job
seekers. How many reckless economists can The New York Times hire a columnists?

On the chart, the DX needed to rise through the 20-Week ema, which was accomplished
on October 1st at 95.5. At the 101 level now, there is resistance at the 102
level. Our longer-term target has been 112.

With firming commodities, the Canadian dollar has recovered from 73.59 in
early November to 74.50. Getting above the 20-Week ema at 75.35 would be constructive.

Precious Metals

There are some cross-currents, which can be fun if you are a white-water kayaker.
In the financial markets, it can be an intellectual challenge.

With the intent of making financial speculation perpetual, central bank recklessness
became unlimited. Market distortions are without precedent and we all know
about reversion to the mean. As in central bank practices. The most distorted
market is that for interest rates.

Politics and finance can never be separated and history is working on a profound
change. People are taking political power from the "experts" into their own
hands, which is constructive. This will also involve the equivalent in finance.
The confection of a national currency has been to serve the state, not the
markets. On the Great Reformation, the public will "privatize" national currencies
by forcing convertibility. Gold has always provided the best choice.

A complete reformation will include making the senior currency convertible
into gold.

In anticipation of this, one would not buy gold or Treasuries. It will take
a few years.

As part of the last Great Reformation, in 1717 Isaac Newton put England on
to a bi-metallic standard. This became a simple gold standard.

In the meantime, the prospect of a firming dollar prevents us from getting
excited about a possible outstanding rally for gold in US dollars. The same
holds for silver, making this another ideal time to avoid fundamental studies
that "prove" there is a "concerning" shortage of silver.

As noted last week, gold stocks relative to the bullion price will need to
end the decline that began in early August.

Using HUI/Gold, the worst was 142 in early November. The next low was 144
and at 150 now, breaking above 155 would be constructive. Getting above the
50-Day at 163 would set the uptrend. With some technical improvement in this
indicator, one could begin to accumulate gold stocks. Lightening up on the
hot coal and base metal stocks would also be timely.

We had this cartoon drawn in December 2008. Emotions were so high that a newspaper
editor suggested leaving our names off.

"[Obama] issued executive orders, and his administrative state issued
tens of thousands of pages of new regulations that took on the force of
law. He called it 'rule by pen and phone'."

- Wall Street Journal, November 15, 2016.

The Forgotten Man

The image of Obama stomping on the Constitution is compelling and was painted
by Jon McNaughton in 2010.

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